Virginia Beach Tournament & Event Center
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VIRGINIA BEACH TOURNAMENT & EVENT CENTER PPEA Proposal to Design, Construct, Operate, and Maintain the Virginia Beach Tournament and Event Center 19th and Jefferson Ave, Virginia Beach, Virginia Volume 1 Eastern Sports Management PPEA Proposal Volume 1 Eastern Sports Management Virginia Beach Tournament & Event Center EXECUTIVE SUMMARY ......................................................................................... 1 DESCRIPTION OF PROJECT ....................................................................................... 1 CAPABILITIES OF THE PROPOSAL TEAM .................................................................... 2 FINANCING PLAN ................................................................................................... 3 LEASE STRUCTURE AND RELATIONSHIP WITH THE CITY ............................................. 3 KEY BENEFITS TO THE CITY OF VIRGINIA BEACH ....................................................... 4 INCOME AND ECONOMIC IMPACT ............................................................................. 4 1. QUALIFICATIONS AND EXPERIENCE .............................................................. 5 A. LEGAL STRUCTURE ......................................................................................... 5 B. EXPERIENCE .................................................................................................. 5 C. POINTS OF CONTACT .................................................................................... 26 D. FINANCIAL STATEMENTS ............................................................................... 27 E. OFFICERS AND DIRECTORS ............................................................................ 27 F. AFFILIATES ................................................................................................. 28 G. CONTRACTORS AND SERVICE PROVIDERS ....................................................... 28 2. PROJECT CHARACTERISTICS ....................................................................... 29 A. PROJECT DESCRIPTION ................................................................................ 29 B. WORK TO BE PERFORMED BY THE CITY. .......................................................... 41 C. PERMITS & APPROVALS. ............................................................................... 42 D. ADVERSE IMPACTS. ...................................................................................... 42 E. POSITIVE IMPACTS ....................................................................................... 42 F. SCHEDULE .................................................................................................. 44 G. ALLOCATION OF RISK FOR DELAYS ................................................................ 46 H. ASSUMPTIONS TO OWNERSHIP, OPERATION, AND USE ..................................... 46 I. PHASED OPENINGS ...................................................................................... 46 J. STANDARDS ................................................................................................ 46 3. PROJECT FINANCING .................................................................................... 47 A. ESTIMATED COST BY PHASE ........................................................................... 47 B. PLANS FOR DEVELOPMENT ............................................................................ 47 C. ASSUMPTIONS .............................................................................................. 47 D. RISK FACTORS ............................................................................................. 47 E. PUBLIC RESOURCES ..................................................................................... 48 F. THIRD PARTY REVENUE SOURCES ................................................................. 48 G. RATINGS..................................................................................................... 49 H. FINANCIAL PENALTIES FOR EARLY TERMINATION ........................................... 49 I. FEES TO UNDERWRITING FIRMS .................................................................... 49 J. LETTER OF INTEREST OR COMMITMENT .......................................................... 50 4. PROJECT BENEFIT AND COMPATIBILITY .................................................... 50 A. BENEFICIARIES AND BENEFITS ...................................................................... 50 B. ANTICIPATED SUPPORT OR OPPOSITION ......................................................... 50 C. PLANS FOR PUBLIC, BUSINESS COMMUNITY, AND GOVERNMENT INVOLVEMENT .. 51 D. ANTICIPATED BENEFITS ................................................................................ 51 Eastern Sports Management PPEA Proposal Volume 1 i Eastern Sports Management Virginia Beach Tournament & Event Center E. COMPATIBILITY WITH LOCAL PLANS ............................................................... 51 F. STANDARDS ................................................................................................. 51 G. PARTICIPATION EFFORTS .............................................................................. 52 Eastern Sports Management PPEA Proposal Volume 1 ii Eastern Sports Management PPEA Proposal Virginia Beach Tournament and Event Center Executive Summary Eastern Sports Management (“ESM”) proposes to design, construct, operate, and maintain the Virginia Beach Tournament and Event Center (the “Center”) adjacent to the Virginia Beach Convention Center (“VBCC”) on land owned by the City of Virginia Beach (the “City”). Allowing nine months to come to an agreement with the City and 20 months to design, permit, and build the Center, doors will open by Thanksgiving 2019 in time for the busiest part of the tournament season. ESM will design and build the Center, then lease it back for 20 years to operate and maintain, with rent determined as a split of net profit. ESM will assume all design, construction, operation and capital maintenance risks for the Center. ESM will partner with the Convention and Visitors Bureau (“CVB”) to fill as many weekends as possible with tournaments and events that draw visitors to the City. ESM will program the Center as a local sports, fitness, and recreation asset from Monday through Thursday and on weekends not otherwise filled by the CVB and ESM. ESM has assembled the strongest, most experienced team to execute this project. We can deliver the Center at a lower cost and with a better design than other groups because of our experience. Our Center business model projects the City earning back more than twice its investment over the life of the lease. Description of Project • We propose a structure that extends 372’ x 579’ (198,190-sqft ground floor footprint) that will have 75,120 sf of mezzanine space for a total of 273,300 sf of finished space. • The space plan will be as follows: o The central open play area for the courts will measure 252’ x 464’ or 116,928 sf. It will accommodate 12 basketball courts, 9 to 12 futsal courts depending on age groups playing, 24 volleyball courts, and 9 indoor field hockey courts. o The mezzanine will consist of sitting and “team camping” area that will be re-purposed during the week for turf field sports. The mezzanine will also have fixed “stadium” seating for 1,786 spectators. Depending on the sport played, there will be additional bleacher seating for 1,440 spectators on the floor. o Below the mezzanine will be play areas for children, meeting rooms, hospitality rooms, kitchen and dining areas, and a large reception and tournament operations area. o The front of the Center will have a large team and personal training area and an open area for children’s play structures. o Outside of the kids play area will be a play structure and an outside seating area near the front entrance. o The back of the Center will have utility rooms, storage areas, bathrooms and service closets. • The scope of work for the project includes: o Site Design o Center Design o Permitting o Construction o Center Planning o Center Operation o Capital Maintenance • The Center will be constructed using City funds. ESM as tenant will have a separate start-up budget for marketing, pre-opening wages, and tenant Furniture, Fixtures, and Equipment (FFE). Eastern Sports Management PPEA Proposal Volume 1 1 Eastern Sports Management PPEA Proposal • ESM will deliver the Center within 20 months from the date of an Interim Agreement with the City, assuming the execution of a Compressive Agreement three months later. • A subsidiary of ESM, ESM VBTEC, LLC, will lease the Center from the City or the City’s Economic Development Authority (“EDA”) and operate the Center, paying rent to the City or EDA based on a split of net profit generated by the Center. • The City will save on development time and construction, total project costs, and operating costs. In addition, the City will receive a share of net profit generated by the Center as opposed to subsidizing the cost of a City-operated recreational facility. Capabilities of the Proposal Team The proposal team has the unique skills and experience to design, construct and manage the new Center for the enjoyment of Virginia Beach residents and the financial benefit of the City. • ESM has a 13-year track record with four facilities and 13 outdoor fields under management. • ESM personnel are sports and recreation professionals with long individual histories of facility and program management, including all the operational elements present in the new Center: event and tournament management, recreation,